Northampton County must write new hotel tax law

State repealed levy in the Lehigh Valley and raised it to 4 percent.

The new state law raising the hotel tax to 4 percent in the Lehigh Valley is causing a stir in Northampton County, where officials learned recently they must write a new law, too, and soon.

The concern comes from the wording in the state law. It repeals the current tax laws in Lehigh and Northampton counties in early September to make way for new ones.

But no one told Northampton County Council and County Executive Glenn Reibman that his county must write a new one if it wants to continue the tax.

They learned about it days ago from local tourism officials, who also just found out.

"There was no courtesy call," Reibman said.

If significant time passes without a new law, or if the county opts not to tax, there could be wide-ranging effects.

The county expected to collect $610,000 this year at the old rate of 3.5 percent.

That money supports the Lehigh Valley Convention and Visitors Bureau and various tourism attractions in the county such as Musikfest.

Council could discuss the matter tonight.

Some members said this is an opportunity to re-examine the law to see if it has worked, or to change it.

Some suggested writing a new law to provide money for the county's $40 million voter-approved open space program.

That could be considered tourism if it attracts visitors, council members said.

" I'd like [for] council to sit down and evaluate what can be done with a hotel tax that does two things," Councilman Ron Angle said. "One, it helps the hotel industry get more guests, and it does something that benefits the citizens of Northampton County."

Council members said they are aware of the deadline but will not rush.

"That's not life and death," Angle said. "As long as it's done right when it's finally done."

Some members suggested hearings to question hotel, tourism and economic development officials.

They also want to ask state lawmakers why the current law is being repealed instead of simply raising the cap from 3.5 to 4 percent, and why no one told the county.

Michael Stershic, president of the convention and visitors bureau, gave letters Wednesday to council and Reibman requesting a new law.

"This funding is critical for us to continue the aggressive promotional efforts that we undertake on behalf of Northampton County and the Lehigh Valley," Stershic wrote.

Reibman said he believes council ultimately will approve a new tax, but only after a lot of debate.

In 2000, state lawmakers approved a hotel tax. Northampton and Lehigh counties set the levy at 3.5 percent.

The counties kept 21.5 percent of the money, to be given in grants to tourism-related attractions, and sent the rest to Stershic's bureau.

Early this month, state lawmakers raised the tax to 4 percent so the extra money in Lehigh County could help pay off the debt of a planned minor league baseball stadium.

Each county would keep the extra half-percent, Stershic said, raising their share of the tax to 31.25 percent.

Lehigh County Executive Jane R. Ervin said Wednesday that county officials are aware of the situation, and the legal department is drafting language designed to implement the new tax. She expects the ordinance to be ready for review by county commissioners at their Aug. 10 meeting, which would provide sufficient time for the new tax rate to become effective when the existing charge expires.

Ervin said commissioners are supportive of the 4 percent. "They're all on board," she said.

Angle has suggested repealing the tax in Northampton County because some of the money that goes to Stershic's bureau is given to the Lehigh Valley Economic Development Corp.

Angle has chastised the agency for not publicly showing how it spends the money.

Councilman Nick Sabatine said council should not be concerned about levying the tax because most of it is paid by travelers, not residents.

He wants council to use the money for its open space program, if that is legal.

For the county to enact a new law by early September, it would have to act quickly.

A county law doesn't take effect until 30 days after it is signed by Reibman.

Stershic said that not having a tax for a short time would not be a major concern, but said that a lapse of a month would be.

Reibman believes the county has hotel tax money left over to pay the grants it has made through the rest of the year to groups such as Musikfest.